Municipal bond taxable equivalent yield

• [DOCX File]California State University, Northridge

  https://info.5y1.org/municipal-bond-taxable-equivalent-yield_1_44fc8e.html

  The after-tax yield on the corporate bonds is: [0.09 x (1 – 0.30)] = 0.0630 = 6.30%. Therefore, the municipals must offer at least 6.30% yields. The taxable bond. With a zero tax bracket, the after-tax yield for the taxable bond is the same as the before-tax yield (5%), which is greater than the yield on the municipal bond. The taxable bond.

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• [DOC File]Chapter 2

  https://info.5y1.org/municipal-bond-taxable-equivalent-yield_1_94471f.html

  The interest earned on a municipal bond is usually free of federal income tax, and possibly of local and state taxes. The yield one would need to receive on a taxable bond to equal the tax-free yield of a municipal bond is called taxable equivalent yield. There are several different municipal bonds available: Revenue bond

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• [DOC File]FCEF

  https://info.5y1.org/municipal-bond-taxable-equivalent-yield_1_0bb211.html

  2. The equivalent taxable yield is: 6.75%/(1 ( 0.34) = 10.23%. 3. (a) Writing a call entails unlimited potential losses as the stock price rises. 4. a. The taxable bond. With a zero tax bracket, the after-tax yield for the . taxable bond is the same as the before-tax yield (5%), which is greater than the yield on the municipal bond. The taxable ...

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• Tax-Equivalent Yield Definition

  What is the equivalent taxable yield for an investor facing a 40% marginal tax rate, and who can purchase a tax-exempt municipal bond with a yield of 7.2? A common yield measure used to compare the yield on a tax-exempt municipal bond with a comparable taxable bond is the equivalent taxable yield. The equivalent taxable yield is computed as ...

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• [DOC File]Soln ch 2 Mkts & Inst - Tulane University

  https://info.5y1.org/municipal-bond-taxable-equivalent-yield_1_0b1b5d.html

  Corporate bond because the after tax yield is 6.25%. Corporate bond because the after tax yield is 4.5%. Municipal bond because the equivalent taxable yield is 6.3%. Municipal bond because the equivalent taxable yield is 6.6%. You will be indifferent between the two because the after tax yields are the same. CHAPTER 3. ANSWERS TO PROBLEMS

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• [DOCX File]Leeds School of Business | University of Colorado Boulder

  https://info.5y1.org/municipal-bond-taxable-equivalent-yield_1_7ea536.html

  Taxable equivalent yield = tax-exempt municipal yield. 1.0 - marginal tax rate. The taxable equivalent yield for a tax-exempt yield of 5.5%, for an investor in a 15% tax bracket, is. Taxable equivalent yield = .055 / [1-.15] = 6%. 2-2. According to the problem, the corporate bond yields 8.4 (1-.28) = 6 percent after tax. The municipal bond has ...

  equivalent taxable yield municipal

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